Transfer Pricing in Serbia: What a Foreign-Owned d.o.o. Has to Document for 2026
If a foreign company or individual owns 25% or more of your Serbian d.o.o., every transaction between you and the d.o.o. is a related-party transaction, and the d.o.o. must attach transfer pricing documentation to its annual corporate income tax return. Serbia has no size exemption. A two-person subsidiary that only invoices its parent is in scope just as a factory is. What changes with size is the form: small, non-loan transactions can go into a short report.
For the 2026 financial year the documentation is due with the tax return, within 180 days of year-end, which is 29 June 2027 for a calendar-year company. The prices it has to defend are being set now, in the invoices and loan agreements of 2026. That is why this belongs on the year-end list rather than on next June’s.
Who counts as a related party?
Article 59 of the Corporate Income Tax Law defines related parties by the possibility of control or significant influence over business decisions. Three tests matter for a foreign founder:
| Test | What it means in practice |
|---|---|
| 25% of shares or votes, held directly or indirectly | Your holding company, and your d.o.o.’s own subsidiaries |
| The same persons hold 25%+ in both companies | Your other companies, in Serbia or abroad — sister companies count |
| Preferential tax jurisdiction | Any non-resident entity from a listed low-tax jurisdiction is treated as related, with no ownership link needed |
Close family members of an owner fall into the same circle. The third row is the one that surprises people: paying an unrelated supplier registered in a listed jurisdiction puts that invoice inside the transfer pricing file.
Which transactions go into the file?
All of them, in both directions. For a typical foreign-owned d.o.o. the list is short and predictable:
- services the d.o.o. sells to the parent (development, support, back office);
- management, licence or brand fees the parent charges the d.o.o.;
- goods bought from or sold to group companies;
- loans in either direction, including an interest-free shareholder loan;
- rent, guarantees and cost recharges.
Article 60 requires the company to show these transactions separately in its tax balance, next to the value they would have had at arm’s length. If the actual price is less favourable to the Serbian company than the arm’s length price — it earned too little or paid too much — the difference is added to the tax base and taxed at 15%.
Full report or short report?
The full report follows the structure in the Rulebook: an analysis of the group, the industry, the functions and risks of each party, the choice of method, and a conclusion. It is a real piece of analysis and usually needs a benchmark.
The short report only lists each transaction, its value and the related party. Under Article 2 of the Rulebook it is allowed for a transaction that is not a loan or credit and meets one of two conditions:
| Condition | Threshold |
|---|---|
| A one-off transaction in the year | value not above the VAT registration threshold: RSD 8,000,000 |
| All transactions with one related party in the year | total not above RSD 8,000,000 |
Three things follow. First, the threshold is counted per related party, so RSD 6 million with the parent and RSD 5 million with a sister company both qualify. Second, loans never qualify: a shareholder loan of any size needs the full treatment, although the prescribed interest rates described below make that part light. Third, the threshold is tied to the VAT law, so it moves if the VAT registration threshold ever does.
The typical small subsidiary — services to the parent under RSD 8 million a year, no loans — ends up with a one-page short report. The moment the parent lends it money, a second, fuller section appears.
How are intercompany loans tested?
Serbia gives taxpayers a shortcut. Each year the Minister of Finance publishes interest rates that are deemed arm’s length for related-party loans. For 2026 they are in the Rulebook published in Official Gazette RS 36/2026, and for companies that are not banks or leasing providers the main ones are:
| Loan | Arm’s length rate for 2026 |
|---|---|
| Short-term, in RSD | 7.13% |
| Long-term, in RSD | 7.21% |
| Short-term, in EUR or EUR-indexed | 4.75% |
| Long-term, in EUR or EUR-indexed | 5.42% |
You may use these rates or run a proper benchmark under the general rules instead. The choice is all-or-nothing: whichever route you pick applies to every related-party loan the company has, given or received. If you choose the general rules, the Tax Administration is not bound by the published rates either.
The test works in one direction for each side of a loan. A d.o.o. that borrows from its parent can deduct interest only up to the arm’s length rate. A d.o.o. that lends to its parent must recognise at least arm’s length interest as income, even if the contract says zero.
Worked example: two loans, two adjustments
Take a Belgrade d.o.o. owned 100% by a Dutch B.V. In 2026 it has two loans, both outstanding for the whole year. Amounts are converted at an illustrative RSD 117.20 per euro; the real calculation uses the official middle rate of the National Bank of Serbia.
Loan 1 — the parent lends the d.o.o. €500,000 for five years at 9%.
| Item | Calculation | Amount |
|---|---|---|
| Interest charged | €500,000 × 9% | €45,000 |
| Arm’s length interest (long-term EUR) | €500,000 × 5.42% | €27,100 |
| Excess, not deductible | €45,000 − €27,100 | €17,900 ≈ RSD 2,097,880 |
| Extra corporate income tax at 15% | RSD 2,097,880 × 15% | ≈ RSD 314,682 |
Loan 2 — the d.o.o. lends €300,000 of surplus cash to the parent for ten months at 1%. Assume, for simplicity, that the ten months fall inside 2026.
| Item | Calculation | Amount |
|---|---|---|
| Interest charged | €300,000 × 1% × 10/12 | €2,500 |
| Arm’s length interest (short-term EUR) | €300,000 × 4.75% × 10/12 | €11,875 |
| Shortfall, added to income | €11,875 − €2,500 | €9,375 ≈ RSD 1,098,750 |
| Extra corporate income tax at 15% | RSD 1,098,750 × 15% | ≈ RSD 164,813 |
Together the two contracts cost the subsidiary about RSD 479,500 in tax that a different interest clause would have avoided. Neither adjustment touches the cash the group actually moved; they only change the Serbian tax base. Interest paid to the Dutch parent also raises a separate question of Serbian withholding tax, which we cover in the guide to paying foreign suppliers and group companies.
Which methods does Serbia accept?
The law lists five, in line with the OECD approach: comparable uncontrolled price, resale price, cost plus, transactional net margin and profit split. Any other method is allowed if those five cannot be applied. For a service subsidiary the usual choice is cost plus or the net margin method: the d.o.o. recovers its costs plus a mark-up that independent service providers earn.
Two practical points for founders who set prices themselves:
- Write the policy down before the year ends. A short intercompany agreement that says “cost plus X%” and is actually followed is worth more in an audit than a benchmark produced 18 months later for prices nobody planned.
- Check the result, not only the formula. If the mark-up was agreed on budgeted costs and real costs came in higher, the d.o.o. may finish the year with a margin well under the one in the contract. A true-up invoice dated before 31 December fixes that; one dated in March does not.
What is due, and when?
| When | What |
|---|---|
| Before 31 December 2026 | Intercompany agreements in place, year-end true-ups invoiced, loan terms checked against the 2026 rates |
| Within 180 days of year-end (29 June 2027) | Corporate income tax return (PDP) with the tax balance and the transfer pricing documentation attached |
Country-by-country reporting is a separate regime for international groups with consolidated revenue of at least €750 million, and it is built around the ultimate parent. A small or mid-sized group is outside it. How the return and the monthly advances work is explained in our guide to corporate income tax in Serbia.
What happens if the documentation is missing?
Two separate things. The first is a misdemeanour fine under the Tax Procedure and Tax Administration Law: RSD 100,000 to 2,000,000 for the company, and RSD 10,000 to 100,000 for the responsible person, which normally means the director.
The second is the costly one. Without a file, the Tax Administration sets the arm’s length price itself in an audit, adds the difference to the tax base, and charges late-payment interest on the resulting tax. Because the limitation period runs for years, one missing file tends to become several adjusted years.
Did the 2026 tax amendments change any of this?
Not for the 2026 financial year. The amendments to the Corporate Income Tax Law published in Official Gazette RS 80/2026 align Serbian rules with EU directives, including the anti-avoidance package with an EBITDA-based limit on interest. Those alignment provisions are written to apply only from the date Serbia joins the EU. The related-party definition, the documentation duty and the short-report threshold described here are the rules for 2026 and, as the law stands today, for 2027. The wider package is summarised in our overview of Serbia’s tax law changes for 2027.
FAQ
My d.o.o. only invoices my own foreign company. Is that really transfer pricing? Yes. One customer that is also the 100% owner is the textbook related-party case. If the yearly total is under RSD 8,000,000 and there are no loans, a short report is enough.
Is an interest-free loan from me to my company a problem? Not for the d.o.o. as borrower: it deducts no interest, so there is nothing to disallow. The loan still has to be reported in the documentation, and it does not qualify for the short report.
Can I prepare the file after the Tax Administration asks for it? The law requires it to be submitted with the tax balance. A file produced later does not undo the fine, and it is weaker evidence for prices set two years earlier.
Do the published interest rates stay the same next year? No. The Minister of Finance issues a new rulebook for each year; the 2026 rates were published in April 2026. Check the new figures before you fix the interest clause for 2027.
How we help
For foreign-owned clients we map the related-party transactions in the autumn, check loan terms against the published rates, prepare true-ups before the books close and file the short or full report with the tax return. If your d.o.o. is still being set up, the year-end checklist for foreign-owned companies shows where this fits. See our accounting services in Serbia and pricing, or contact us.
Note: general information based on Serbian law in force in October 2026. The 2026 arm’s length interest rates apply to the 2026 tax period only; new rates are published each spring. Euro conversions are illustrative. Transfer pricing outcomes depend on the facts of each transaction — have your own case reviewed before the year closes.